CDNs should pay eyeball networks, too.

Valdis.Kletnieks at Valdis.Kletnieks at
Tue May 1 22:18:48 UTC 2012

On Tue, 01 May 2012 18:03:06 -0400, David Miller said:

> From an accounting perspective, every R&D effort that I have seen or
> been a part of was not billed to any customer.  R&D has always, in my
> experience, been an internal charge against a company's own profits.

RIght - and when pricing the result of the R&D, you take into account the
internal charges and estimated sales volume to determine a target price
point.  R&D was $316K and you estimate you can sell 100 of them, you're
going to have to charge at least $3,160 a copy to make a profit on the
project.  You sank $150M into R&D and think you'll sell a million units, you'll
need to charge $150 to break even.  And so on.

The point is that if you already got *paid* the $316K, it's morally wrong to
include it in the calculation of "sunk costs we need to recoup to turn a profit".
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